Archive for the ‘Virtual Portfolio Review’ Category

Wednesday Watch List Update – Stocks We Like for 2018

Related imageIt's very important to have a Watch List.

I like to have about 24 stocks I keep a close eye on so that, when something happens and they go on sale, I'm ready, willing and able to pull the trigger in an instant.  We did that in November, when Macy's (M) announced their earnings and we thought they were just what we wanted yet the market sold them off after the opening pop.  That gave us a window to act and, because we follow M closely – we KNEW it was time to act and I issued a Top Trade Alert, identifying it as our top contender for Stock of the Year for 2018 (replacing LB, another retailer who has already flown higher).  

We issued our 2017 Watch List back in March and in May we picked 13 out of 24 for action, including M as well as BMY, ESRX (still cheap), FCX, GE (cheaper), GILD, LB, PSA (still cheap), QCOM, TGT, GCI, FMCC and SEE (still cheap).  So, out of 13 picks we had been watching and pulled the trigger on, 10 are winners, 2 are flat and one (GE) is down.

This is the key to understanding our system.  GE was our only non-winner out of 13 picks (the flat ones make money too using our "Be the House – NOT the Gambler" system) and is still very manageable but, since they cut the dividend, we're not jumping back in yet – other than short puts.  

Image result for real investingIn order to become a real investor, you have to break out of your "winning" and "losing" mind-set and that's very difficult because your broker – who wants you to TRADE, not INVEST, gives you a daily scorecard with minute-by-minute updates to encourage you to thing of your portfolio as something that should constantly be fiddled with to improve your "score".  They even highlight your losers in red – so they bother you and further encourage you to dump slumping stocks by raising the margin requirements on them – making them even harder to hold onto.  

Imagine if you ran a baseball team that way – constantly cutting players who were having a bad month and hiring
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Philstockworld November Portfolio Review

Image result for one million dollars animated gif$2,121,342! 

Not bad for the 4th Anniversary of our Primary Portfolios.  We began this lesson on November 26th of 2013 and allocated $500,000 to our Long-Term Portfolio and $100,000 to our Short-Term Portfolio with the intention of demonstrating our balanced, paired portfolio tactics over time.  Now, 4 years later, we're up $1,521,342 (253%), which is right at the top of our 40% annual compounded gains we can expect from this strategy when it goes very well.  

You can't double up in a year playing a hedged strategy like this because we're constantly betting against ourselves but by "Being the House – NOT the Gambler", we are able to CONSISTENTLY make 20-40% returns and, in this non-stop bull market – it's been more like 40%.  Well, a bit under 40% as $600,000 at 40% compounded for 3 years would be $2.3M but that's my fault, not the system's – as we got so close to goal back in October that I put the brakes on and shifted to a more neutral stance and, in our last review, we "only" made $14,565 for the month and, since last month, we've "only" made another $12,867 – it's like it's hardly worth getting up in the morning, right?  

Really, I am sorry I've been so cautious but I could not, in good conscience, risk those spectacular gains into Q3 earnings and the Holidays.  We have a lot of open positions and they'd be difficult to adjust quickly in a crash so I've been erroring on the side of caution but I promise to drink heavily over the holidays and come back all gung-ho bullish if this rally is still going in January.  

This too, is part of the lesson though.  Go over the last couple of reviews (archives here) and see how we went from very bullish in August, where we added $133,849 for the month, to lockdown mode in September and my reasons for being cautious were laid out in that review (9/29).  The S&P was at 2,519 at the time and, despite the "rally" – it's only just now testing 2,600 – two months later, so I don't regret missing out on a 3.2% rally.  If…
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PhilStockWorld 2017 Watch List Update – Rolling into 2018

Related imageIt's very important to have a Watch List.

I like to have about 24 stocks I keep a close eye on so that, when something happens and they go on sale, I'm ready, willing and able to pull the trigger in an instant.  We just did that this week when Macy's (M) announced their earnings and we thought they were just what we wanted yet the market sold them off after the opening pop.  That gave us a window to act and, because we follow M closely – we KNEW it was time to act and I issued a Top Trade Alert, identifying it as our top contender for Stock of the Year for 2018 (replacing LB, another retailer who has already flown higher).  

We issued our 2017 Watch List back in March and in May we picked 13 out of 24 for action, including M as well as BMY, ESRX (still cheap), FCX, GE (cheaper), GILD, LB, PSA (still cheap), QCOM, TGT, GCI, FMCC and SEE (still cheap).  So, out of 13 picks we had been watching and pulled the trigger on, 10 are winners, 2 are flat and one (GE) is down and the one that's down is the one we like most at the moment.  Our "too early" entry on GE was:

GE (3/5) – Forever $30 but talk about a safe place to park your money!  They even pay a 3.2% dividend (0.89) while you wait for something to happen – and it won't.  GE is a $262Bn company that pays no taxes ($464M refund last year on $9Bn in earnings!) and has tons of money overseas – what's not to love?  Even better, you can sell the 2019 $28 puts for $2.50 and use that free money to buy the $25 ($6.10)/30 ($3.05) bull call spread for $3.05 and that's net 0.55 on the $5 spread for a near 10-bagger if GE simply holds $30.  There's anothe interesting way to play this one and that's to effecively buy it by selling the 2019 $32 calls for $4.40 for a net $27.60 entry and then buy the $28 calls ($4.20) for a net 0.20 credit and then just sell 1/2 of the April $30s (0.75).  That way, you are collecting 0.375 per long and each time you collect $1.70 (4-5 quarters)


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Philstockworld October Portfolio Review

Image result for one million dollars animated gif$2,108,475! 

That's up "just" $14,565 since our September Review on our paired LTP/STP Portfolios, which was our intention after gaining an insane $133,849 from August.  Our intent was to lock in our gains into earnings and that's excactly what we did by pressing our hedges, which caused the STP to lose $56,000 as the market kept going higher while the gains in the LTP continued to keep us just slightly bullish and offset the losses on our hedges.  Of course, keep in mind that $14,565 is an annualized $175,000, which really doesn't suck considering we began with a combined $6,000 in November of 2013 so Happy 4th Anniversary to our main portfolios!  

Read my notes from the last reports – no changes – we're cautious for the same reason but pay particular attention to the kinds of adjustments we made and how they worked out.  That's another HUGE benefit of keeping our portfolio well-balanced – the stability gives us lots of time to tinker with and perfect our positions as it's very easy to make a few minor adjustments, when you don't have to worry about having to make a major one…

Short-Term Portfolio Update (STP) – Submitted on 2017/10/19 at 3:20 pm:  $430,680 is down $56,347 on our hedges in the past month and that neatly negates about 2/3 of the LTP's gains so we're a bit more bearish than we were last time (in our paired portfolios) after making several bearish adjustments that were intended to move us to neutral.  

So, on the whole, we made about $25,000 despite ourselves, which is the strength of our model for selling premium.  The primary purpose of the STP is to protect the LTP – it's not supposed to make money in a bull market but it BETTER make a lot of money when we turn bearish.  Of course, it always has – that's why it's up 330% in 4 years despite usually being "wrong".

  • AMZN – They keep going for $1,000 and keep failing.  Our intention was to risk earnings but it's too


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Philstockworld Top Trade Review

Image result for top trade ideasTop Trades has become one of Philstockworld's most popular Memberships and that's a shame because I actually hate trading services that just give out trade ideas.  Unfortunately, that's what the market demands and, though Top Trade Members miss out on the trading education and deep discussions we have in our Live Member Chat Room, they usually do get a lot of great trades.

We began Top trades in August of 2015 and year one saw 96 out of 119 Trade Ideas (80.6%) made money immediately (by the first review) and half of the intial losers turned around over time as well.  We started year two's first quarter, covering Sept-Dec with 22 of 30 trade ideas (73%) in the green but, for example, one of our 8 "losers" at the time of the review (2/20) was RH – a trade that was in our Long-Term Portfolio:

As of the last review, we only had the short puts, which were down $1,400 (23%) so a "loser:" and, at the time (2/20), I said:

As you can see, they hit our target floor at $25 but we were in Vegas and forgot to add the bull call spread at the time – though I still like the plan.  The puts, by themselves, are now $7.40 ($7,400) so down $1,400 (23%) and I still like that sale along with 10 2019 $25 calls $9.75 ($9,750), selling 10 of the $35 calls for $6.20 ($6,200) for $3,550 so we still


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PhilStockWorld September Portfolio Review

$2,093,910!  

That is a LOVELY $133,849 gain on paried LTP/STP Portfolios since our Aug 20th review.  I said at the time that it is ridiculous to make this kind of money in a month (6.8%) but I also said we'd be fools not to take advantage of the gift the market is handing to us.  The STP, where we keep our hedges, lost $6,813 as of our review date (these reviews are from last week) but that was lucky and now we're down to $460,302 but, on the other hand, the LTP is clocking in at $1,654,569 so $2,114,871 is up another $20,961 since last week – that's crazy!  

As I have been emphasizing all week, we are putting 25-33% of our long profits into our short hedges – in order to lock in those long gains.  When you are netting 6.8% even after the hedging that insures you will keep that 6.8% (or most of it) when the market turns sour, then you can certainly afford to be cautious.  At the end of the year, we'll be up 60-70% whether the market is up or down while, if you let it all hang out and went for 85% – maybe you'll have it at the end of the year and maybe you won't – I'd much rather be sure. 

Anyway, read my notes from the last report – no changes – we're cautious for the same reason but pay particular attention to the kinds of adjustments we made and how they worked out.  That's another HUGE benefit of keeping our portfolio well-balanced – the stability gives us lots of time to tinker with and perfect our positions as it's very easy to make a few minor adjustments, when you don't have to worry about having to make a major one…

Short-Term Portfolio Review (STP):  $487,027 is down $6,813 from our 8/15 review but no apologies there as it's fantastic that that's all we lost while the LTP made 6 figures.  That's because we made sensible adjustments back on the 15th but, otherwise, we didn't touch our STP, which has $481,657 in CASH!!! – just in case we ever need some money if things do go on sale.  

Despite the mountain of CASH!!! (we started with just $100,000 on 11/26/13), we are…
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PSW August Portfolio Review

$2 MILLION Dollars.  

Well, actually it's $1,960,061 but that's still up 326% from our $600,000 start in our paired Long-Term and Short-Term Portfolios since their inception on 11/26/13.  We're "only' up $440,607 (29%) in 13 months (see our July, 2016 portfolio review) as, even at that time, I wondered "Are We Too Bullish".  

The S&P was at 2,120 last July and now at 2,425 so up 14% which means we're outperforming the S&P by 100% so I certainly don't think we've become too bearish, we've simply tapered our 40%+ annual growth of the first 3 years in favor of spending more money on hedges – to lock in these ridiculous gains.  

And they are ridiculous.  As I noted on Friday, there isn't enough money in the World, nor are the Central Banks printing money fast enough to pay everyone 40% annual gains.  In fact, if you start with $600,000 and make 40% a year for just 10 years, that's $17.3 MILLION!  So, I will ask you again, do you think it's likely or unlikely we continue along this path?

No, that would be silly, right?  No matter how confident we are in our own abilities to make money, we have to recognize that this is a unique market situation that is inherently unsustainable.  It's a lot like catching a really good wave while you are surfing – we're good surfers and we will take full advantage of it but you can't fool yourself into betting the next wave will be even bigger, and the one after that and the one after that – it's simply not how the universe works.

Of course, we know what's causing these giant wavers – Central Bank Policies – but then we have to consider if those are sustainable and, as you can see from the rate chart – the amount of money they need to pump into the system begins to grow exponentially to sustain these asset gains.  We started with $600,000 but the S&P 500 is now at about $21Tn alone so it will cost SOMEONE $8Tn to add 40% to it.  The entire GDP of the United States is $18.5Tn and is growing at MAYBE 3%, which is $242Bn – far shy of…
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PhilstockWorld May Portfolio Review (Members Only)

$1,800,221 – that's up 300% from our $600,000 start on our paired portfolios back on 11/26/13.

We haven't made too many changes in the past 30 days but we still gained a very nice $47,535 since the April Review ($1,752,686) on our paired Long and Short-Term portfollios.  While $47,535 is 8% of our original, it's "only" 2.7% of our April total so yes, we are playing a bit too conservatively for this market – despite putting up some very impressive numbers.  

The S&P 500 was at 2,360 on April 9th and now 2,433, so it's up 3.1%, which means we're now one of those funds that is underperforming the S&P 500, right?  But that's not the purpose of our portfolio strategy – clearly we outperform the S&P over the long haul and that's because our hedges keep us (mostly) from losing money in the downturns.  Being safe from downturns has a price though, when the market is gaining at an 18% annualized pace – we aim for a more conservative average than that.

Since April 9th, we've added new longs on ABX, DIN, EWZ, IMAX, SEE, SKT, TLRD and VZ and, if you are having trouble recognizing some of the symbols – well that's my point – we're running out of cheap stocks to buy at these days, so we either have to drink the Kool-Aid and buy high and hope to sell higher or we can wait PATIENTLY for a pullback that gives us better entries on better stocks.  

Going back to last July's review, when at S&P 2,120 I asked "Are We Too Bullish?", we were at $1,519,454 so we're up about 20% from that total but keep in mind we still trade the LTP like it's a $500,000 portfolio with 80% of our money in CASH!!! and gaining $300,000 on $500,000 is 60% – that's why our growth is slowing now, the way we're plaing it, 20% a year is just fine!  The key is to learn how to CONSISTENTLY get those 20% returns, so they can compound over time.  $500,000 compounded at 20% for 20 years is $19,168,799 – that should be enough to paper anyone's retirement, right?

The trick is to
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Philstockworld Top Trade Review

Image result for top trade ideasTop Trades has become one of Philstockworld's most popular Memberships and that's a shame because I actually hate trading services that just give out trade ideas.  Unfortunately, that's what the market demands and, though Top Trade Members miss out on the trading education and deep discussions we have in our Live Member Chat Room, they usually do get a lot of great trades.

We began Top trades in August of 2015 and year one saw 96 out of 119 Trade Ideas (80.6%) made money immediately (by the first review) and half of the intial losers turned around over time as well.  As of our prior review, covering Sept-Dec, we had 22 of 30 trade ideas (73%) in the green already but, for example, one of our "losers" was RH – a trade that was in our Long-Term Portfolio:

As of the last review, we only had the short puts, which were down $1,400 (23%) so a "loser:" and, at the time (2/20), I said:

As you can see, they hit our target floor at $25 but we were in Vegas and forgot to add the bull call spread at the time – though I still like the plan.  The puts, by themselves, are now $7.40 ($7,400) so down $1,400 (23%) and I still like that sale along with 10 2019 $25 calls $9.75 ($9,750), selling 10 of the $35 calls for $6.20 ($6,200) for $3,550 so we still have a net $2,450 credit (or a $3,850 credit if starting from scratch) and our worst case is owning RH at net $22.55 – 16% below the current price.  That's an official add for our LTP!  

Obviously, the situation has much improved, despite the recent pullback.  The short 2019 $25 puts are down to $4.10 ($4,100) and the 2019 $25/35 bull call spread is in the money at $7 ($7,000) for net $2,900, up $5,350 (218%) from our original net $2,450 credit and well on the way to making the full $10,000 (still a good trade if you can settle for a double).  

The secret to
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Philstockworld April Portfolio Review (Members Only)

What a first quarter!  

When we last reviewed, back on Jan 22nd, the S&P closed at 2,271 and we were generally playing for a flat market and worried that we might be a bit too bearish but, now that the S&P is at 2,362 (up 4%), we're a lot more comfortable with a more bearish stance – albeit after adding a few bullish positions along the way.  

Before we get into a review I want to make a very important point.  Our Options Opportunity Portfolio (OOP) was last reviewed on March 15th, and it's a self-contained portfolio, with the hedges right alongside the long-term positions.  As I've noted on many occasions, when you have a well-balanced portfolio and you are practicing our system of BEING THE HOUSE – Not the Gambler, you shouldn't have to do much from month to month (see last year's Forbes interview for a good explanation).

We did add 4 bullish trades in the last two weeks (ATI, CDE, CHK & NLY) and, on the 15th, we called for 2 of our positions to be adjusted and one was closed (SONC) – that's it.  On March 15th our OOP was at $270,475 and, as of Friday's close, we're at $278,177 – up $7,702, which is 7.7% of our original $100,000 start (8/8/15) and that's just fine for two week's "work", isn't it?

Related imageInvesting doesn't have to be stressful – certainly not if you are on the house side of the table.  Mostly it's a matter of keeping ourselves well-balanced and letting the premiums we sold run down over time – that's what casinos do and they seem to do very well for themselves!  

You just need to accept the fact that betting on the markets is no better than betting on casino games – you may win or you may lose but, over time, the odds are rigged against you – especially with options so, logically, if we SELL options to suckers who think they can beat the house – we'll do very well!  That's it – that's the whole secret to our success.

Our last major Portfolio Review was back on Jan 22nd and, since
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Phil's Favorites

The data war behind net neutrality

 

The data war behind net neutrality

Courtesy of Roger KamenaL'Université TÉLUQDaniel LemireL'Université TÉLUQ , and Nicolas ScottUniversité de Montréal

Ajit Pai, former Verizon lawyer turned head of the U.S. Federal Communications Commission (FCC), rolled back President Barack Obama’s net neutrality policy in December....



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ValueWalk

Exploring Gravitational Waves

By joniferdingcong. Originally published at ValueWalk.

In 2016, US scientists for the first time announced their detection of gravitational waves, ripples in space and time hypothesized by Albert Einstein a century ago. Such a discovery represents a scientific breakthrough, opening the door to an entirely new way of observing the cosmos. In 2017, the Nobel Prize in Physics was awarded to three US scientists for the detection of gravitational waves. To better grasp the process of their discovery, CGTN’s Tian Wei spoke to two of them: Rainer Weiss, Emeritus Professor of Physics at MIT and Kip Thorne, Emeritus Professor of Physics at Caltech. Chen Yanbei, Professor of Physics at Caltech, also joined the talk.

mikkehouse / Pixabay...

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Zero Hedge

Stocks Suffer As 10Y Yields Reach 2014 Highs, Curve At Inflection Point

 

Stocks Suffer As 10Y Yields Reach 2014 Highs, Curve At Inflection Point

Courtesy of Zero Hedge

Overnight saw 10Y Treasury yields touch 2.64%, topping the post-election peak to its highest since September 2014 (and crossing Jeff Gundlach's "red line" for stock damage). However, the yield curve's bear-steepening may suggest a turning point.

10Y is up almost 30bps since The Fed hiked rates in December...

...

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Insider Scoop

14 Stocks Moving In Friday's Pre-Market Session

Courtesy of Benzinga.

Gainers
  • Forward Industries, Inc. (NASDAQ: FORD) rose 64.5 percent to $2.04 in pre-market trading after the company reported the acquisition of Intelligent Product Solutions.
  • PLx Pharma Inc (NASDAQ: PLXP) rose 31.2 percent to $8.00 in pre-market trading. Janney Capital initiated coverage on PLx Pharma with a Buy rating and a $14.00 price target.
  • Acorda Therapeutics Inc (NASDAQ: ACOR) rose 15.4 percent to $28.85 in pre-market trading amid M&A chatter. The...


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Digital Currencies

Bitcoin and cryptocurrencies are just the Beanie Babies of the moment

 

Bitcoin and cryptocurrencies are just the Beanie Babies of the moment

Courtesy of Vitaliy Katsenelson, Contrarian Edge

If you invested in the markets circa 1999, it is hard to observe the Bitcoin mania and not experience the feeling that you’ve seen this movie before and know how it will end – in losses and tears. The internet was a great idea that convinced a lot of great minds to invest capital and energy into businesses that have transformed the world – Amazon, eBay, Cisco, PayPal … the list is very long (though in fairness the list of non-survivors is even longer – but they are not here to remind us of their nonexistence).

R...



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Chart School

Short Covering Driving Gains in Semiconductors and Nasdaq 100

Courtesy of Declan.

The Nasdaq 100 breakout cleared channel resistance, the fifth significant breakout in four months. All technicals are posting new near-term highs which also meant the short generated on the tag of the rising channel is negated.


The Semiconductor Index also enjoyed a substantial breakout as short covering drove traders out of their positions. Technicals see an improvement with a relative gain against the Nasdaq 100.

...

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Biotech

How Alzheimer's disease spreads throughout the brain - new study

Reminder: Pharmboy and Ilene are available to chat with Members, comments are found below each post.

 

How Alzheimer's disease spreads throughout the brain – new study

Courtesy of Thomas E CopeUniversity of Cambridge

Harmful tau protein spreads through networks. Author provided

Alzheimer’s disease is a devastating brain illness that affects an estimated 47m people worldwide. It is the most common cause of dementia in the Western world. Despite this, there are currently no treatments that are effective in curing Alzheimer’s disease or preventing its relentless progressio...



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Mapping The Market

Trump Admin Bans CDC From Using Words Like 'Science-Based,' 'Diversity'

By Jean-Luc

These are the policies of a theocracy, not a modern democracy:

Trump Admin Bans CDC From Using Words Like ‘Science-Based,’ ‘Diversity’

The Trump administration has prohibited the Centers for Disease Control and Prevention (CDC) from using words like “science-based,” “diversity,” and “transgender” in their official documents for next year’s budget, according to the Washington Post.

Senior CDC budget leader Alison Kelly met with the agency’s policy analysts on Thursday to announce ...



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Members' Corner

An Interview with David Brin

Our guest David Brin is an astrophysicist, technology consultant, and best-selling author who speaks, writes, and advises on a range of topics including national defense, creativity, and space exploration. He is also a well-known and influential futurist (one of four “World's Best Futurists,” according to The Urban Developer), and it is his ideas on the future, specifically the future of civilization, that I hope to learn about here.   

Ilene: David, you base many of your predictions of the future on a theory of historica...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Promotions

NewsWare: Watch Today's Webinar!

 

We have a great guest at today's webinar!

Bill Olsen from NewsWare will be giving us a fun and lively demonstration of the advantages that real-time news provides. NewsWare is a market intelligence tool for news. In today's data driven markets, it is truly beneficial to have a tool that delivers access to the professional sources where you can obtain the facts in real time.

Join our webinar, free, it's open to all. 

Just click here at 1 pm est and join in!

[For more information on NewsWare, click here. For a list of prices: NewsWar...



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Kimble Charting Solutions

Brazil; Waterfall in prices starting? Impact U.S.?

Courtesy of Chris Kimble.

Below looks at the Brazil ETF (EWZ) over the last decade. The rally over the past year has it facing a critical level, from a Power of the Pattern perspective.

CLICK ON CHART TO ENLARGE

EWZ is facing dual resistance at (1), while in a 9-year down trend of lower highs and lower lows. The counter trend rally over the past 17-months has it testing key falling resistance. Did the counter trend reflation rally just end at dual resistance???

If EWZ b...



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All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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FeedTheBull - Top Stock market and Finance Sites



About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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